More Charges Emerge Against Big Data Startup Founder

Federal authorities have beefed up their case against the 30-year-old founder of a San Francisco big data startup, who prosecutors accuse of scamming his friends out of money that he said would be invested in the company.

Jonathan Mills, the former CEO of MotionLoft, was arrested last month. On Thursday, a grand jury in San Francisco indicted him for wire fraud and money laundering in connecting with defrauding multiple victims out of more than $500,000, federal officials said Friday.

The allegations are a cautionary tale about today’s tech boom and the hype it has generated.

Mills is accused of encouraging his acquaintances, including his personal physician, to invest in MotionLoft because it was about to be acquired by Cisco Systems, a deal that could yield big profits.

Instead, over the last year, “Mills spent most of the money to fund a lavish lifestyle including private jet trips to luxurious vacation destinations, expensive entertainment, and lulling payments to other victims,” according to the indictment, which was filed in U.S. District Court for the Northern District of California.

Mills faces up to 30 years in prison. After his arrest, a relative posted property to secure his release to a halfway house pending trial, federal authorities said.

Calls and emails on Friday to MotionLoft were not returned. No attorney representing Mills could be located.

MotionLoft is part of a growing field called location analytics. The company, whose offices are located in downtown San Francisco, places motion-detecting sensors near storefronts in 12 U.S. cities and uses those signals to count vehicles and pedestrians.

According to the company’s website, CVS Pharmacy and Saks Fifth Avenue purchase its data, which the retailers use to answer questions like why sales might be lagging or how their foot traffic stacks up to competitors.

In 2012, the city of San Francisco started incorporating MotionLoft data into its traffic congestion reports as part of its open data initiative. MotionLoft was recognized by San Francisco Mayor Ed Lee at a press conference announcing the initiative.

Mills was fired from MotionLoft in December 2013, according to the U.S. attorney’s press release.

TechCrunch wrote an article that month describing allegations against him.